An old machine was purchased 3 years ago at a cost of ₱50,000. It was estimated to have a useful life of 8 years, with a salvage value of ₱5,000. It is now going to be replaced by a new machine costing ₱70,000 and ₱30,000 trade-in will be allowed for the old machine. Determine the sunk cost if depreciation has been computed by the (a) straight line method, (b) sinking fund method at 16% and (c) SOYD method'.
An old machine was purchased 3 years ago at a cost of ₱50,000. It was estimated to have a useful life of 8 years, with a salvage value of ₱5,000. It is now going to be replaced by a new machine costing ₱70,000 and ₱30,000 trade-in will be allowed for the old machine. Determine the sunk cost if depreciation has been computed by the (a) straight line method, (b) sinking fund method at 16% and (c) SOYD method'.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
An old machine was purchased 3 years ago at a cost of ₱50,000. It was estimated to have a useful life of 8 years, with a salvage value of ₱5,000. It is now going to be replaced by a new machine costing ₱70,000 and ₱30,000 trade-in will be allowed for the old machine. Determine the sunk cost if depreciation has been computed by the (a) straight line method, (b) sinking fund method at 16% and (c) SOYD method'.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education